The Lawletter Vol 41 No 1
Charlene Hicks, Senior Attorney, National Legal Research Group
When a catastrophic accident causes one or more people to die, multiple legal questions inevitably arise. Among these is the issue as to whether and to what extent the deceased person's medical insurance company is entitled to recoup the costs it paid for the person's medical treatment prior to death from any wrongful death settlement or verdict eventually entered in favor of the decedent's estate and/or beneficiaries.
Although the answer to this question depends on the law of each particular state, an examination of Administrative Committee of Dillard's, Inc. Group Health, Dental & Vision Plan v. Sarrough, No. 1:14-CV-01165, 2015 WL 3466568 (N.D. Ohio June 1, 2015), appeal dismissed, No. 15-3718 (6th Cir. Aug. 12, 2015), may be illuminating. There, Hanan Saah was injured in a February 2011 car accident in Ohio. Her employer, Dillard's, paid $260,000 of her medical expenses pursuant to a federal Employee Retirement Security Act of 1974 ("ERISA") health plan. Saah subsequently died in July 2011. Her estate was eventually awarded $300,000 in various wrongful death settlements. Dillard's then claimed a right to the settlement proceeds in order to recoup its $260,000 in medical costs.
The district court determined that, as an initial matter, it was important to distinguish, and to allocate the amount of funds attributable to, the two different components of the settlement: Saah's survival claim versus the wrongful death claim. Dillard's, as the ERISA-approved health benefit plan, had a right to obtain reimbursement of medical expenses paid from net settlement proceeds allocable to the survival portion of the settlement. Under Ohio law, the survival action belongs to the decedent's estate and, therefore, was subject to subrogation.